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Judgment
A.K. Mathur, C.J.
This is a reference u/s 256(1) of the Income Tax Act 1961 (for short, the Act), at the instance of the assessee and the following question of law has been referred by the Tribunal for answer by this Court:
"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was liable to pay interest under sections 234-B and 234-C of the Income Tax Act?"
Brief facts for disposal of this reference are as under: The assessee Company filed a return on 29-12-1989 showing an income of Rs. 62,610.00 which was computed u/s 115-J of the Act. The assessment was completed by accepting the return income. Later it came to the notice of the Authorities that there has been under assessment of the income inasmuch as it related to the depreciation aspect. In the computation of the income, depreciation had been claimed as provided u/s 32 of the Act, whereas while computing the income u/s 115-J, depreciation was required to be calculated as per Schedule 14 of the Companies Act. In view of the above position, notice u/s 148 of the Act was issued in response to which the assessee Company filed return on 28-1-1993 showing an income of Rs. 6,34,648.00 computed u/s 115-J of the Companies Act. Notice u/s 143(2) of the Act was issued fixing the case on 18-3- 1993. The Assessing Officer, after computing the income of Rs. 6,34,648.00 u/s 115-J of the Act, issued demand notice by order dated 18-3-1993. Aggrieved against this order, an appeal was preferred before the C.I.T. (A). The C.I.T. (A), affirmed the order of the Assessing Officer. It was, contended that there is no provision for advance tax on deemed income u/s 115-J of the Act and, therefore, charging interest under sections 234-B and 234-C of the Act was not justified. The C.I.T.(A), after referring to a decision of Delhi Bench in case of Steel Authority of India vs. C.I.T., held that interest is chargeable under sections 234-B and 234-C of the Act. He, therefore, allowed the appeal in part on this question only. Aggrieved by this order, the Revenue filed an appeal before the Tribunal and the Tribunal, in view of the Special Bench decision given in case of Sutlaj Cotton Mills Ltd. vs. A.C.I.T., (1993) 199 I.T.R 164 has overruled the earlier decision of Delhi Tribunal in case of Steel Authority of India. Therefore, the learned Tribunal affirmed the levy of interest under sections 234-B and 234-C of the Act and reversed the finding of the C.I.T. (A) and allowed the appeal of the department. Hence the present reference has been made by the Tribunal at the instance of the assessee.
We have gone through the order passed by the learned Tribunal. Sections 234-B and 234-C of the Act do not make any reference of section 115-J. Section 234-B only lays down that where advance tax is required to be paid u/s 208 of the Act and there is a failure or that if the amount of the advance tax paid under the provisions of section 210 is less than 90% of the assessed tax, then in that case, the assessee is liable to pay interest. Similarly section 234-C also, with regard to interest for deferment of advance tax, says that if the company has to pay advance tax on its current income on or before 15th day of June and such tax paid is less than 15% of the tax due on the returned income or the amount of such advance tax paid on or before 15th day of September is less than 45% of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than 75% of the tax due on the returned income, then the Company shall be liable to pay simple interest at the rate of one and one-half per cent per month for a period of three months on the amount of the shortfall from 15% or 45% or 75% as the case may be of the tax due on the returned income. Therefore, on reading both the provisions, there is no mention that in case of section 115-J, both the sections will not become applicable. The only crux of the matter is that whenever the assessee pays advance tax u/s 208 of the Act, irrespective of section 115-J, he has to pay the tax and if the tax deposited is less than 90%, the assessee will have to pay simple interest.
We are satisfied that the view taken by the Tribunal is correct and we answer the question in favour of the Revenue and against the assessee.